Roadmap for Potential Volatility
What to Expect from a 'Sell the News' Event: Zooming Out to the Stage of the Market
The highly anticipated rate cut finally occurred, but the market's reaction was muted for the major indices suggesting the positive news was already priced in. As usual, the Fed's announcement triggered intraday volatility, sending the S&P 500 (SPX) directly to our central weekly level of $6,555 before an immediate bounce. Similarly, the Nasdaq 100 (NDX) found support exactly at the $23,975 zone, which was anticipated last Saturday as the line in the sand dividing bullish and bearish momentum.
Several key ETFs also bounced today with impressive accuracy and synchrony from their central weekly levels:
SPY from $654
QQQ from $583
DIA from $458.4
SMH from $301.6
GLD from $335 (as one of the levels on sight)
IWM from $238.2 (it briefly breached this level for a couple of minutes before bouncing)
That said, there is no confirmation of a pullback just yet, and staying disciplined is key to avoiding any premature decisions. It's worth noting that the VIX retraced by 3% but it’s still above the key level mentioned last Saturday.
The major indices are still above their central weekly levels, as are half of the biggest mega-caps in the top 11 of the SPX. However, some securities, like NVDA, lost their $174.9 level, as AVGO $356.6, which suggests caution for the semiconductor sector.
The levels mentioned were published last Friday, ahead of this week's trading. As mentioned, having these levels in advance is a fantastic tool for traders and investors. To see the most recent publications, use the links below:
Last Friday, I mentioned a rare technical condition in the stock market. As promised, we'll study that condition today. This is a technical publication designed to help you navigate the next three months psychologically. Make sure to upgrade your subscription and unlock the answers to the following questions:
Are we at or near the top of the bull market?
What stage of the bull market are we in?
If there's a pullback, how deep could it be?
This content is based on pure technical metrics and historical patterns that have proven reliable in previous similar rare conditions, having occurred in every case over the last 50 years in the stock market. The conclusions are objective and are not based on personal opinions. This is a must-read publication.
For the ones who haven’t downloaded the first section of my eBook, please do, and stay tuned, every week a section will be added:
Let’s begin:
Over the last several months, I have published editions with this same approach: analyzing rare technical conditions and the patterns that followed them. As every premium subscriber can confirm, the bullish moves I anticipated have occurred, in some cases with impulsive moves that exceeded expectations. Back in April and May, all the signals were bullish, and in the midst of widespread market fear, every technical indicator suggested the beginning of a new bull market despite of several gaps below the price. We set targets of $6,486 for the SPX and $23,654 for the NDX, both of which were reached in a rapid fashion and acted as resistances during the last three or four weeks before being conquered the last one, along with targets for MSFT, PLTR, GOOG, and many other securities analyzed in this publication.
The rare signal or technical condition I mentioned last Friday is based on the current stage of the market, which considers the following: